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Related tickers and likely impact
USD/CAD
▼ Likely negativeRelevance: low
| Market | Currencies |
|---|---|
| Close on 10/15/2026 | 1.41850 |
| Change that session | -0.35% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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- Sentiment improved , but new tariffs weigh on business outlook : BoC report
The Bank of Canada's business outlook survey found average business sentiment improved in the third quarter, though firms remained worried about rising costs and the war in the Middle East. About three-quarters of the interviews, however, took place before trade talks between Canada and the United States broke down at the end of August and Canada announced new counter-tariffs. Afterward, firms pointed to new U.S. tariffs on some goods and Canadian counter-tariffs as weighing on their outlooks, and the bank said tariffs are dampening sentiment, weakening export and investment prospects, and pushing up costs and prices. A separate consumer survey found long-term inflation expectations rose to match short-term ones, and consumers reported better financial health than last quarter, though high prices and economic uncertainty still weigh on them. The bank's next rate decision and monetary policy report are due Oct. 28.
- Businesses expect Canada inflation rate to remain above 3 %
The Bank of Canada's quarterly Business Outlook Survey, released Monday, shows many businesses expect Canada's inflation rate to stay above 3% over the next two years, and about half plan to pass on some or all cost increases linked to the Iran war and tariffs. Inflation rose to 3.1% year over year in September from 3% in August, mainly due to higher energy prices. In the companion Canadian Survey of Consumer Expectations, households' median expectations were 4.03% for the next year and 3.88% for the next two years, with tariffs cited as the top factor. Firms' outlooks worsened and inflation expectations rose after trade talks with the U.S. broke down on Aug. 22, but they are not expected to return to levels seen at the start of the trade conflict in March 2025 or the April oil-price peak. The Bank of Canada will announce its interest rate decision on Oct. 28, and these surveys are among the inputs for that decision.
- Bank of Canada could still hike rates in 2026
Bank of Canada Governor Tiff Macklem sounded hawkish in an interview at an International Monetary Fund meeting, leading economists to suggest a rate hike could still come in 2026. Canada's headline inflation rose to 3.1% year over year in September, slightly below the 3.2% estimate, driven by higher gasoline prices, and has been above the bank's 1–3% target for eight of the past nine months. Core inflation slowed to 1.9% month over month (from 2%) and 1.8% year over year (from 1.9%), while the benchmark rate has been held at 2.25% for the past seven meetings. Bank of Montreal said markets had leaned toward a hike, but a tame core reading won't necessarily stop the bank as it stays focused on headline inflation above 3%. Royal Bank of Canada expects the bank to hold through the rest of the year and hike next year, given job losses in August and September, while KPMG Canada expects a hold in October with a possible hike as soon as December.
- Inflation risks are rising as oil shock lingers, Macklem says
Bank of Canada governor Tiff Macklem said inflation risks are rising as high energy prices persist, with the conflict ongoing, shipments curtailed and refinery capacity damaged. Inflation has been above the bank's two per cent target since May and was at three per cent in July and August, and economists largely expect it to edge up again in September as Brent and WTI crude hover around US$100 per barrel. A higher reading could increase pressure on the bank to raise its overnight rate, currently at 2.25 per cent, for the first time in a year. Macklem said the bank has so far looked through the direct impact of oil prices but is prepared to adjust monetary policy as needed.
- Canada inflation rate rises above 3 % on higher energy prices
Canada's consumer price index rose 3.1% year over year in September, up from 3% in August, mainly due to energy prices that were 19% higher than a year earlier. Grocery prices grew 1.7%, the smallest annual increase since May 2024, while shelter prices rose 1.8%. Core measures were steadier, with CPI-median easing to 1.9% from 2% and CPI-trim at 1.8% versus 1.9%. Bank of Canada governor Tiff Macklem warned that the risk of inflation broadening and becoming more persistent has risen, while BMO still expects rates to stay on hold but says that could change, and TD also forecasts a hold through 2027. The central bank announces its overnight rate later this month.
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